Have you been thinking about improving the energy efficiency of your home? If so, then you might want to check into the available energy tax credits for homeowners. During 2006 and 2007, taxpayers can claim a credit of 10% for buying qualified energy efficient home improvements. The following items are potentially eligible for the tax credit:
– insulation systems that reduce heat loss/gain
– exterior windows (including skylights)
– exterior doors
– metal roofs (meeting applicable Energy Star requirements)
The maximum lifetime credit for these items is $500, and no more than $200 can come from windows.
There is also a credit for adding qualified solar panels, solar water heating equipment, or a fuel cell power plant to your home. Taxpayers are entitled to a credit of 20% of their investment in solar panels, up to a maximum credit of $2, 000 and another, equivalent credit for a water heating system. However, neither of these can be used to heat a pool or hot tub. The credit for fuel cell power plants is 30%, and cannot exceed $500 per 0.5 kilowatts of capacity.
And keep in mind that we’re talking about tax credits here, and not tax deductions. So these amounts come straight off the top of your tax bill, as opposed to reducing it fractionally.
To qualify, these improvement have to have been placed in service sometime during 2006 or 2007.